A "money printing machine" with nowhere to go? ——Counting the pitfalls of mine hosting

Mining machines are "money printing machines" that continuously mine various cryptocurrencies. These "money printing machines" must work in mining farms. Many miners only have mining machines but no mining farms, so they need to be hosted in mining farms. For the entire mining service industry, the mining machine hosting link has the most pitfalls . During our interviews, we also heard various strange pitfalls. Today we will introduce all aspects that miners need to consider when seeking mining farm hosting.

01 Mine compliance risks and operational risks

The first pitfall of mining farm hosting is that after the mining machine is hosted at the mining farm, the machine is gone. If the mining farm you host has compliance risks or operational risks, you may suffer the risk of "losing both the machine and the money".

Netizen Xiao Yang shared his mining experience with us.

Xiao Yang said that he was a person who could not hold on to his coins. In order to hold on to his coins peacefully, he chose mining. Why can mining hold on to his coins? Xiao Yang gave the following reason: " Mining does not have a clear cost. For me, cost is a very heavy anchor. The cost of mining is difficult to calculate accurately, and the impact of the cost anchor is greatly weakened. This is what impresses me most about mining. "

Xiao Yang found a mining farm with cheap electricity prices through a friend. The owner of the mining farm explained the source of the cheap electricity prices, and this "sincerity" touched the hosting users.

The mining farm approved the project as a "big data" project that the government subsidizes. The mining farm was very confident that the project would be approved, and in order to gain the trust of the hosting users, the mining farm directly gave the hosting users a relatively low electricity price. Later, due to various reasons, the "big data" project applied by the mining farm was not approved, and the subsidy fell through. In addition, due to poor management, the mining farm finally owed the power station electricity bills, and the power station took the mining farm to court. In order to preserve the assets, the court sealed the mining farm and the hosting mining machines.

The mine is located in a remote area, and it is difficult for the small miners involved to protect their rights. Even if they invest the costs of transportation, accommodation, and time, there may not be any results. Many small miners like Xiao Yang have no choice but to give up.

It is not difficult to avoid this pitfall. When choosing a mine, look for one that has been in operation for a long time, has a good reputation, and is operated in the form of a company . A more worry-free solution is to find a joint mining provider with a good reputation and a long operating time, which provides professional services for the entire mining process, including the purchase of mining machines, trusteeship, operation and maintenance, and residual value processing . For example, the joint mining under Mr. Jiang has a formal contract that clearly states that users own the property rights of mining machines. Users of joint mining can take away the machines at any time, and if the above situation really happens, they can also assert their rights. In contrast, Xiao Yang chose a mine that had been in operation for a short time, and there was no clear contract at the time, and the mine was still personal.

02Safety and convenience of the mine

When miners choose a mine, they also need to pay attention to the location of the mine. The location of the mine is mainly considered from two dimensions: safety and convenience .

For example, the flood in Sichuan this year affected many mines. Some mines were forced to shut down, some were flooded, and some were even washed away by the flood. All of these will cause considerable losses to miners. When choosing a mine, miners should try to avoid mines that have natural disasters such as floods and landslides.

In addition, the selection of mining farms must also take into account the convenience of transportation . Many mining farms are built in remote mountainous areas with very poor transportation conditions. If the mining machine is hosted in such a mining farm, once it involves maintenance, loading and unloading, and migration, it will affect the coin-making work of the "printing machine".

03Electricity Price and Stability

Electricity costs account for the bulk of the cost of mining, and the stability of electricity has a decisive impact on the stability of the mining farm. Therefore, when choosing a mining farm, it is necessary to examine the mining farm's hosting electricity price and electricity stability .

For mining farms and miners who host machines, electricity prices involve the greatest interests of both parties, so there are naturally many pitfalls in this link.

For example, the overall investment situation of mining farms this year is not ideal. Some mining farms with bad reputations have difficulty in attracting investment. They openly offer very cheap electricity prices, and then charge users with various excuses such as site fees and operation and maintenance fees after the machines are hosted. It is easy for novices to fall into the trap.

In another case, miners and the mine agree on the hosting electricity price, and then the mine finds various excuses to raise the price. If they do not agree, they must move out before the specified time. The "money printing machine" is on someone else's territory, and miners are very passive, and generally have to compromise.

How to avoid the above pitfalls?

First, don't be greedy for cheapness. There is no such thing as a free lunch. Your size determines your bargaining power . If you get a price that does not match your size, it may seem like a bargain, but all bargains come at a price . Under the cheap bait, there must be a pit waiting for you that requires a greater price .

Second, find a mining farm with a long operating time, good reputation and large scale, and lock in the hosting electricity price by signing a formal agreement with the mining farm.

In terms of electricity stability, thermal power mines are more stable than hydropower mines, but relatively speaking, the average price of thermal power is more expensive.

This year, some areas in Sichuan Province launched park electricity, and the stability of park electricity is no worse than that of thermal power. Compared with direct power supply, park electricity is not only more stable, but also more transparent in price. If you can find a mine hosting with park electricity, give priority to the mine with park electricity . If there are no park electricity mine resources, choose a mine backed by a larger hydropower station, which has better stability.

Regarding park electricity , we will not go into details here. We will make a special introduction in subsequent articles.

In addition, when choosing a mining farm, whether it involves migration; if it is a hydropower mining farm, you should ask whether the electricity price is charged according to the annual electricity price or according to the flood and dry seasons, and whether there is a flat water period. How to make a decision depends to a large extent on the model of the "money printing machine". If it is a high-performance S19, once a power outage occurs, it means a greater loss. A good "money printing machine" must be equipped with a stable mining farm to keep profits running , so a stable thermal power mining farm is a better choice. If it is an old machine like S9, then not only should you choose a hydropower mining farm, but you should also choose a method based on the flood and dry electricity price. It is best not to have a flat water period, because the safety margin of S9 is low, and low electricity prices are very important. The longer the low electricity price lasts, the longer the S9 "money printing machine" can be turned on .

04Mining infrastructure and stability

The infrastructure of a mine is a big topic, including site selection, plant, power supply system, network, temperature control, etc. The site selection and power supply are mentioned above. Here we mainly introduce the network and temperature control .

As far as the network is concerned, mining farms generally choose two network operators to serve as backup for each other ; on the other hand, the stability of the network is highly correlated to the distance between the mining farm and the network node . Generally speaking, the more remote the place, the worse the network stability.

High temperature is also one of the key factors affecting the stable operation of mining machines. High temperature not only affects the power consumption of mining machines, but also affects the normal operation and service life of mining machines. High-quality mining farms have relatively complete cooling facilities: water curtains, hot and cold isolation plates, fans, etc.

When miners are evaluating the infrastructure of a mine, if they are unable to visit the mine on site, they can ask the mine to take a video of the site . On the other hand, if the mine is large and newly built , the site will be more secure in terms of infrastructure and stability.

05Various routines for mine operation and maintenance

For small miners, they do not have the operation and maintenance capabilities themselves, and it is unlikely that they will send special personnel to the mine for operation and maintenance. The operation and maintenance are all left to the mine. There are various pitfalls here. We will introduce a few typical pitfalls.

1. Falsely reporting power consumption

The official website of the mining machine manufacturer will have the power consumption data of the mining machine. The actual power consumption is affected by environmental factors such as temperature, so the power consumption data given by the official is also a range. This provides some unscrupulous mining farms with the convenience of falsely reporting power consumption. Some unscrupulous mining farms take the opportunity to report 5% or even more power consumption and charge users more electricity fees. For example, the actual power consumption of the mining machine is 3000W, but the power consumption is calculated as 3200W. This link is not transparent to users and is very dependent on the integrity of the mining farm .

▲Power consumption of Antminer S19Pro

2. Theft and substitution

Some mining farms even use excuses such as power outages to steal users’ computing power for mining.

In addition, some mining farms may use bad things to exchange good things for your good things. For example, the hashboard, power supply, or even the whole machine. If it is a new machine, the pit of swapping can be circumvented by some methods. Before hosting or after hosting to the mining farm, get the SN code of the mining machine (Ant and Shenma mining machines are called SN code, and Avalon mining machines are called DAN). This is equivalent to the ID card of the mining machine. The SN marked on the shell of the new machine is the same as the SN of the hashboard. Getting the SN of the mining machine can prevent the machine from being swapped to a certain extent .

▲SN code of Antminer S19

3. Operation and maintenance capabilities

The operation and maintenance capabilities of the mine are also what miners should focus on. The operation and maintenance capabilities are mainly reflected in risk prevention, exception handling and response time .

For example, in preventing mining machine poisoning, high-quality mining farms will have a set of scientific methods and do a good job of network isolation. In this way, even if some mining machines are poisoned, network isolation can ensure that most mining machines are not affected. The stronger the abnormal handling ability and the shorter the response time, the shorter the time it takes for the "money printing machine" to resume operation.

06 Conclusion

When choosing a mining farm for hosting, it is important to do research before hosting. In summary, the following points need to be examined:

1. Choose a mine that is compliant and has low operating risks;
2. When choosing a mine, you must consider both the safety of the site and the convenience of transportation;
3. The electricity price and stability should be given priority consideration, and decisions should be made based on the situation of the mining machine;
4. Infrastructure such as mining farm network and temperature control;
5. The scale, reputation and operation and maintenance level of the mine.

It is difficult for novice miners to have systematic inspection capabilities. For these miners, we recommend that they choose to cooperate with joint mining service providers that have been in business for a long time, are large in scale, care a lot about their reputation, and have a good reputation . After accumulating experience and forming systematic decision-making capabilities, they can consider looking for a mining farm for hosting.

If you do not do any screening when selecting the ore and host the mining machine in some bad mines, it is inevitable that you will fall into the trap. It can even be said that you have been cheated the moment you choose the inferior mine, but the "breakout" has not yet occurred.

Always remember: there is no free lunch in the world, all bargains come at a price, and learning from experience can effectively avoid many pitfalls.

Do you have any experience worth sharing regarding mining machine hosting and mining farm selection?